Analysis

Data and digital

Brexit deal analysis 

What does the Trade Agreement say?

The Trade and Cooperation Agreement does not grant a data adequacy decision, although this was not a part of the FTA negotiations. However, agreed alongside the FTA is an “interim” period that will allow EU data to flow to the UK for a period of four months, which may be extended by a further two months. The FTA itself contains provisions that prevent data localisation in either territory. Between them, the two commitments effectively remove the cliff edge for data at the end of the year.

The Agreement also contains provisions to facilitate digital trade which the UK government described as the most “liberalising and modern digital trade provisions”. These provisions include specific commitments to no “prior authorisation” and facilitation of electronic contracts, as well as more general commitments to digital trade.  

How does this compare to what was expected?

The absence of an adequacy agreement at this stage was as expected, as the data adequacy decision is a unilateral decision by the European Commission, and was unlikely to be concluded before the FTA. However, a transition period in a side agreement is extremely welcome and will reduce the amount of actions businesses have to take in preparation for the end of this year.

What are the actions for business?

The interim period included in this agreement will allow the EU to conclude its adequacy assessment. Should the UK be granted adequacy in the next few months, there will be no further action for business to take and data can continue to flow freely across UK-EU borders.

However, the UK may only be granted restricted adequacy as the EU has done in other decisions, e.g. for Japan.

In case the UK is not granted full data adequacy, businesses should utilise the remainder of this interim agreement to explore implementing appropriate legal safeguards such as standard contractual clauses.  

To discuss specific support with your Brexit preparations based on this latest development contact: Deloitte Brexit Insights.

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